How to Respond to an NLRB Investigation

By: Otto S. Shill, III

For employers in western states, labor disputes may seem like remote events that happen between unions and companies in industrial cities east of the Mississippi River.  After all, Arizona is an “at will employment” and “right to work” state, isn’t it?  But here in Arizona the local regional office of the National Labor Relations Board (NLRB) is aggressively enforcing the National Labor Relations Act (the Act), which prohibits any employer, whether unionized or not, from using discriminating hiring practices or otherwise interfering with employees’ rights to act collectively to improve the circumstances of their employment or to consider adopting a union organization.  The job of the NLRB is to protect the rights of employees guaranteed under the Act.  Employers can therefore expect that facts are often interpreted by both the agency and the courts in favor of employees.  This means that Employers need to inform themselves and their management employees about how to avoid problems and to respond to enforcement actions. 

When the NLRB regional office receives a complaint, it opens an investigation, giving the assigned investigator a limited period of time to collect information about the alleged violation.  The investigator uses this investigation period to gather evidence that it will use to assess its case and to determine whether or not to litigate a case.  Evidence and witness statements provided by an employer during this crucial time become part of the administrative record and will be used in subsequent litigation.  Although employers get a chance to present their case, the Regional Director often draws inferences negative to the employer, and investigators do not always prompt the employer to offer evidence that could be used to rebut these inferences.  The result often is that the NLRB Regional Director finds that he has evidence that will allow the agency to prevail in litigation and then offers a settlement that includes hiring the complainer and/or paying him or her back pay to the date of alleged discrimination.  All of this happens under time pressure imposed by the agency’s Regional Director so that employers have little time to think and react.  Employers often characterize the process as costly and unfair.

Employing legal counsel early in the enforcement process gives an employer important advantages.  Counsel can help to develop and present evidence in a way that can rebut the negative inferences drawn by the Regional Director based on an incomplete view of the facts and that may cause the agency to reconsider its litigation risks.  Even if a case cannot be resolved during the investigation, the administrative record developed during the investigation will become critical during the litigation that follows.  Both administrative law judges of the agency and the courts can legally ignore evidence that is not presented to the agency in a timely manner.  In some cases, the administrative investigation is often the most critical phase of a case.  Hiring counsel who can help prepare the right response early in the enforcement process could prevent litigation or substantially reduce the cost of a settlement, saving literally thousands or tens of thousands of dollars. 

At Jennings, Strouss & Salmon, our attorneys have significant experience in assisting employers avoid, and defend themselves against, enforcement actions by government agencies, including the NLRB.   We are anxious to help businesses to improve their profitability by avoiding the difficulties that come with government enforcement actions including NLRB investigations.

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Otto S. Shill, III is a Member at Jennings, Strouss & Salmon and is a part of the Tax, Estate Planning and Probate group. He can be contacted at oshill@jsslaw.com or 602.262.5956.